Nifty gave up early gains and closed in negative on May 2 but above its crucial support level of 11,700. The S&P BSE Sensex failed to hold on to its crucial support of 39,000.
Though Nifty witnessed breakout above its previous high of 11,760 and touched a new all-time high of 11,856, the market is largely sideways in the range of 250 points for last four weeks.
The index hasn’t broken its previous swing low of 11,550 thus, maintaining the sequence of higher highs and high lows. Hence, 11,550 becomes a pivotal support level for the market.
However, breaking below 11,550, the market will see a break in the current uptrend and profit booking will emerge in the market initially towards 11,350-11,310 levels.
On the upside, 11,800-11,860 will act as resistance zone for the market. Crosses above 11,860 on a sustainable basis, Nifty can rally initially towards 12,000 and then 12,200.
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PVR: Buy| LTP: Rs 1,763| Stop Loss: Rs 1,695| Target: Rs 2,000| Upside 13%
The stock has been consolidation in the range of Rs 1,650 and Rs 1,100 odd level for the last two years. It has formed a bullish cup and handle pattern on the weekly chart and witnessed a breakout in early April.
After consolidating above the breakout level for the last few weeks, the stock has now resumed its uptrend and hit a new all-time high of Rs 1780 earlier this week.
The up move was backed by high volumes and strong momentum indicated by the long body bullish candle. The price has given a breakout on the upside from the Bollinger Band. The expansion of bands indicates a continuation of the trend in the direction of breakout on the daily chart.
MACD line has given a positive crossover with its average above the equilibrium level on the daily chart. Thus, the stock can be bought at current levels and on dips towards Rs 1645, and a stop loss below Rs 1695 for a target of Rs 2000 levels.
Aurobindo Pharma: Buy| LTP: Rs 818.65| Stop Loss: Rs 780| Target: Rs 950| Upside 16%
The stock has seen a multi-year consolidation of more than three years between Rs 895 and Rs 500 odd levels. Since September last year, the stock has consolidated between Rs 830 and Rs 695 levels.
Currently, the price is trading at a breakout level and is likely to see a breakout on the upside which will take it towards the all-time high of Rs 895.
Last week, the stock witnessed a strong up move backed by high volumes indicating buying participation in the stock.
The price has given a breakout on the upside from the Bollinger Band, and with the expansion of bands indicate a continuation of the trend in the direction of breakout on the daily chart.
MACD line has given a positive crossover with its average above equilibrium level on the daily chart. Thus, stock can be bought at current levels and on dips towards Rs 805 with a stop loss below Rs 780 and a target of Rs 950 levels.
Indian Hotels Company: Buy| LTP: Rs 154| Stop Loss: Rs 146| Target: Rs 185| Upside 20%
The stock has seen a major consolidation between Rs 161 and Rs 120 levels for the last 15 months. On the shorter-term time frame, it has formed a rounding bottom pattern over the four-month period and saw a breakout in March to touch a high of Rs 161.
Breakout was on strong momentum and high volumes which indicates buying participation in the stock. The recent correction from the high has been on below-average volumes and tested a breakout level.
Also, the price has taken support at its 21-days exponential moving average and holding well above it. The Relative Strength Index (RSI) and Stochastic have given a positive crossover with their respective averages on daily chart suggesting the correction is overstock is resuming its uptrend.
Thus, the stock can be bought at current levels and on dips towards Rs 151 and a stop loss below Rs 146 and a target of Rs 185 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.